Tuesday, 6 June 2017

The Saga of the Estonian Main Island Ferries

This is the updated English version of my article that was published in the 1/2017 edition of Ulkomatala, there translated to Finnish by Olli Tuominen and Kalle Id.

Over the past years there has been a lot of fuss and scandals around the Estonian island ferries, most notably those connecting the mainland to the two largest islands, Saaremaa (Virtsu - Kuivastu) and Hiiumaa (Rohuküla - Heltermaa). In fact, it could almost be said that few people remember any times at all when there wasn't any fuss around the said ferry services.

Since the beginning of times (also known as 1994), the two shipping routes, along with several other routes between smaller islands and mainland, were operated by Saaremaa Shipping Company or its subsidiaries. Over that time, stockholder Vjatšeslav Leedo, sometimes referred to by the media as the “Ferry king”, or more literally "Barge King"*, became a widely known face of the island ferry monopoly, both the improvements made to the ferry services as well as the controversies.

Starting from 1997, over the course of some years, several larger ferries – Ofelia (1968, Kröger Werft), Scania (1972, Aalborg Værft), Viire (1989, North East Shipbuilders; chartered), St. Ola (1971, Meyer Werft) - were introduced on the routes, remarkably improving the quality of the service, as well as capacity compared to the older and smaller ferries. However, a decade later those 2nd hand ships had become very outdated and in 2007, an order was placed to BLRT Fiskerstrand for three new ferries. As a result, Muhumaa, Saaremaa and Hiiumaa entered service in March 2010, June 2010 and May 2011, respectively. The newbuilds, being much faster and larger, brought an end to a number of problems, for example slow and occasionally unreliable service in heavier winter weather, and vehicle queues in ports that could sometimes be many kilometers long.

However, Vjatšeslav Leedo's ways of running the business more often than not came with controversy. Almost constantly there was an air of dissatisfaction with the sums of subsidies he extorted from the government. On some of the colder winters, he was accused of breaking ice just shortly before the Estonian Maritime Administration prohibited it in order to let the ice grow thick enough to open up ice roads that people could use to drive to the islands for free - which would then replace the profitable ferry service.

Considering the aforementioned, it is no wonder that sometimes, proposals popped up for building a bridge to connect the mainland with Saaremaa, or at least to nationalize the ferry service. The former has never gone beyond the stage of investigation due to several reasons, most of them environment-related, as well as due to the decreased need after the arrival of the new ferries in 2010-2011. However, a chance to do the latter was looming as the contract with Väinamere Liinid, a subsidiary of Saaremaa Shipping Company was due to expire in October 2016.

Research and analysis to determine whether nationalizing is feasible started already in 2011 and the initial plan, coined by the Ministry of Economic Affairs and Communications (hereinafter Ministry) in 2013, was to buy or build the ships for a state-owned company and rent them to a private operator. Already then, some said that time is pressing, but that it is realistic if action is taken right away. Slow action was taken and state-owned Port of Tallinn was looking into procuring the ships and awaiting a final go-ahead from the Ministry, but in early 2014 the Estonian prime minister resigned, bringing with him the entire government as required by the constitution. The new Minister of Economic Affairs and Infrastructure Urve Palo (hereinafter Minister) looked into the matter and some months later decided to cancel the old plan, accusing the previous minister of acting too slowly and saying that there is no longer any guarantee that the new ships would be ready by October 2016. With that, on the last day of June 2014, public procurement was announced to find an operator who would have four new purpose-built or up to 86 months old ships to operate on the Saaremaa and Hiiumaa routes by the start of the new contract period. Another condition was that the government reserved the right to buy the ferries after the contract period ends in 2026.

That course of action was highly unpopular, because the hopes to end the monopoly of Vjatšeslav Leedo and his Väinamere Liinid had stemmed and now it was looking a lot like another 10 years with no change. Väinamere Liinid themselves protested too, by making a proposal to change the conditions of the deal, pointing out, among others, that it is not possible for them to build a fourth new ship in time (their Saaremaa, Hiiumaa and Muhumaa met the conditions). That proposal, however, was rejected. Still, they put forward an offer, but it was deemed non-compliant.
Port of Tallinn, at the same time, announced a procurement to find builders for four new ships in order to be able to put forward an offer. However, they received no offers themselves and thus were not able to participate; nonetheless, they moved forward to direct negotiations with potential builders.

As no suitable offers were received by the Ministry, direct negotiations were started with both Väinamere Liinid as well as Port of Tallinn. The former displayed a very open attitude, but warned that the connection with the islands might be suspended when their contract ends - if Port of Tallinn wins, stating that it is impossible to have four new ships built by that time. Port of Tallinn continued negotiations and upon being announced as winners, ordered two ferries from Remontowa shipyard in Poland, and two from Sefine shipyards in Turkey. However, the contract with the government could not be signed right away as, quite predictably, Väinamere Liinid disputed the outcome. Nonetheless, the dispute was lost and on the 11th of December 2014, a contract was signed between the Minister and Port of Tallinn, making the latter responsible for the Saaremaa and Hiiumaa ferry traffic until end of September 2026.

Väinamere Liinid, again quite expectedly, did not give up the fight so easy, suing the Minister and even taking the matter to European Commission. Relevant court cases are still going on at the time of writing this article.
Additionally, the newbuilds of 2010 and 2011 were taken to Germany in August 2015, where they started serving the Cuxhaven-Brunsbüttel route where they still sail now, an action seen by many as revenge from Vjatšeslav Leedo and Saaremaa Shipping Company, despite opposite claims from Leedo himself. The connection with the Estonian islands was continued with the older ferries, bringing back long lines in the harbours, some degree of unreliability and a very large degree of public dissatisfaction.

Meanwhile, Port of Tallinn held a naming contest for the new ferries and in May 2015 it was announced that the four new ships will be named Tõll, Piret, Leiger and Tiiu after local mythological heroes. But then, in August 2015, things got very bitter as the chairman and one member of the board of Port of Tallinn, along with several other people were taken into custody, suspected of large scale bribery and money laundering, partially in relation to the ferry building contracts. As a result, over the course of some months, the entire board was switched.

As 2016 started, so did the first doubts that the newbuilds will be ready for service by October. Promised deadlines for the arrival of the ferries were pushed several times, starting from one ferry making it a bit later than well in time, then a couple of the ships not arriving by October, and eventually it became clear that none of the ships would arrive in time to start service according to the contract. It was speculated that the shipyards have no real motivation to hurry now that the people they negotiated with were out of the business; in any case, the new board took the beating, chartered the old serving ferries from Väinamere Liinid and successfully started operating on the 1st of October, taking the stand that it's better to have good quality ferries rather than rushed and unfinished ones. A fifth spare ferry, the Regula was bought from Väinamere Liinid, sparking another scandal as the 4-million price that was paid for her was considered outrageous; the sale as well as the charters drew attention to Vjatšeslav Leedo again, as his company was very nicely profiting from the mess, much as if they had retained the contract – exactly what was supposed to be prevented by the whole story.

Hiiumaa of Saaremaa Shipping Company, Leiger of TS Laevad and Ionas, chartered by Saaremaa Shipping Company to replace the newer ferries that were sent off to Germany.Photo: TS Laevad OÜ

Finally, on the 19th of December, the first of the ferries, Leiger, was christened in Tallinn by Helgi Põllo, having arrived in Estonia 9 days earlier after a strenuous journey of over a month from Turkey. The shipyard had made several attempts to deliver her earlier, but TS Laevad, the subsidiary of Port of Tallinn responsible for the ferries, rejected, apparently due to minor shortcomings. Nonetheless, the ferry received positive feedback from the crew and started service on the Rohuküla-Heltermaa route on the 22nd of December.

The 2nd ferry, Tõll, arrived from Poland on the 9th of January 2017, and was christened by Lelet Aavik in Kuivastu on the 21st of January, before starting service on the Virtsu-Kuivastu route.

The 3rd ferry, Tiiu, started her journey from Turkey on the 13th March, and made it to the Baltic Sea just so neatly that there were hopes that she could be joined by the 4th ferry, Piret as she comes from Poland, but as the latter stayed in for a little longer, that didn't quite happen. Still, the two last ferries arrived with just a few days inbetween, so it was possible to see them together in Tallinn for some time, which was possibly a rare opportunity, as the ferries serve on different routes.
Tiiu was christened by Helen Kõmmus in Heltermaa on the 8th of April, and joined Leiger in service on the following day.
Piret was christened by Mareli Ots in Tallinn on the 12th of April, and joined Tõll in service on the 14th.
Despite the long wait, or perhaps exactly because of the long wait, it seems that the new ferries have quickly become loved by the people and got mostly positive feedback.

Additionally, it was recently announced that the spare ferry Regula will get a refit and a new livery to better match the newbuilds.

* The estonian word for barge (praam) is very often mistakenly used instead of the correct word for ferry (parvlaev).